Cities Outlook 2012 Tips The Cities That Will Offer The Silver Lining To The Gloomy National Economic Forecast

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LONDON, U.K.
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23 Jan 2012:
Many UK cities are continuing to feel the effects of the downturn, and disparities between cities are growing, according to Cities Outlook 2012. However, despite the somber national forecast, Centre for Cities’ annual health check of UK cities suggests that there will be glimmers of growth from some cities this year.

The national economy is struggling to create the numbers of jobs needed to drive growth, or to balance job losses in the public sector. This pattern has played out very differently across UK cities.

Cities Outlook, published today (Monday 23 January 2012) and supported by IBM and the LGA, shows that the gap between cities with stronger and weaker private sectors is widening. In February 2008, the gap in the claimant count rate between Hull and Cambridge was 3.2 percentage points. By November 2011, this gap had widened to 6.1 percentage points. This example is not isolated. The report highlights that there are six times more claimants in the most troubled neighbourhood in Rochdale than there are in the most troubled neighbourhood in Cambridge*.

The annual index illustrates how cities with less dynamic private sectors, such as Hull, Doncaster and Newport will find it more challenging to offset the combination of a weak national economy and the ongoing shrinkage of the public sector.

As cities respond to the challenges of high unemployment, a declining public sector and a reduction in real wages, those that bucked the trend and performed well against the odds, such as Edinburgh, Cambridge and London, have common traits. They have strong private sectors, high numbers of skilled residents, and large numbers of ‘knowledge workers’ – people who work in professions like accountancy, law and finance.

Centre for Cities is calling on the Government to invest in those cities that are primed for growth. As these cities grow and create jobs, they will drive the national recovery. Cities that are facing more entrenched challenges will require different solutions and support from Government to give residents the skills needed to find jobs and start businesses.

FIVE TO WATCH: Cities such as Milton Keynes and Aberdeen are well placed to drive the national economic recovery in this difficult economic climate. They have seen high number of business start ups, they have larger pools of highly skilled residents, and they are highly innovative with significant numbers of patents registered:

Knowledge workers (2010)

Residents with NVQ4+ Qualifications (2010)

Patents per 100,000 population (2010)

Business Start-ups per 10,000 population (2010)

Projected Public Sector Job Losses by end 2012 (% of total employment)

Aberdeen

17%

44%

15.7

47.7

-1.8

Cambridge

30%

51%

113.0

35.8

-2.2

Edinburgh

26%

47%

11.5

42.6

-2.4

London

22%

41%

10.9

65.0

-2.1

Milton Keynes

22%

22%

10.8

50.1

-1.7

The report also identifies cities that are likely to face real challenges in 2012. They have fewer people with high skills, they have more people claiming Jobseekers Allowance and a larger proportion of their total jobs are made up by the public sector. Cities like these are likely to be more vulnerable to rises in unemployment in 2012:

Knowledge workers (2010)

Residents with Qualifications no higher than 5 GCSE at D-G (2010)

Patents per 100,000 population (2010)

Business Start-ups per 10,000 population (2010)

Projected Public Sector Job Losses by end 2012 (% of total employment)

Doncaster

5%

30%

8.3%

26.3%

-3.5%

Hull

7%

32%

4.2%

23.5%

-3.6%

Newport

10%

30%

5.0%

27.2%

-6.2%

Sunderland

9%

28%

2.5%

16.8%

-4.2%

Swansea

14%

25%

8.2%

24.5%

-5.6%

Alexandra Jones, Chief Executive of Centre for Cities, said: “The year ahead is going to be tough for all UK cities but Cities Outlook 2012 shows that some cities are well-placed to kickstart economic growth. However, some cities have been hit particularly hard by recession and the gap between cities is widening. This makes it vital that government policy is tailored to meet the needs of each city rather than one-size-fits-all. What is right for Brighton and Reading will not be right for Dundee and Middlesbrough.

“During 2012 cities should take the lead in shaping their local economies, and the Government should give them the financial and political powers they need to make the right decisions for growth. Where cities face greater social and economic challenges, the government should offer support to help places adapt and respond to a rapidly changing global economy.”

Steven Peel, IBM Business Development Executive, said:

“Cities Outlook 2012 highlights the challenges confronting cities today and the widening gap between their ability to respond - both should be a cause for concern and a catalyst for decisive action. Leaders will need to be innovative and bold within their cities to identify and create competitive advantage and drive economic growth.

"The 'Smartest Cities' will be those that have a complete and integrated view of the information associated with city systems such as energy, transport, education and employment - the very foundations needed to stimulate economic development. Those that do will be equipped with insight that will enable them to really understand the dynamics within their cities and deliver targeted improvements in the quality of public services and in the creation of attractive locations for people and business alike."

Notes to editors:

* These neighbourhoods (small statistical areas as defined by ONS) are those with the highest job seeker’s allowance claimant rates of any neighbourhood in their city.

Cities Outlook 2012 is available upon request or at www.centreforcities.org/outlook12 from Monday 23 January. The Centre for Cities is very grateful for the support of IBM and the Local Government Association (LGA) for this independent report. Except where otherwise indicated, all views expressed are those of the Centre for Cities and do not necessarily reflect those of IBM or the LGA.

The Centre for Cities uses the Department for Communities and Local Government Primary Urban Area (PUA) definition of a city for the English urban areas included in Cities Outlook 2012. Primary Urban Areas are an aggregate of local authorities that make up the ‘built-up’ area of a city, defined as having a population of 125,000 or more.

PUA data only exists for English cities. For Welsh and Scottish cities, we have used the corresponding local authority area, with the exception of tightly-bounded Glasgow, where we have defined the city as an aggregate of five local authorities: West Dunbartonshire, East Dunbartonshire, East Renfrewshire, Renfrewshire and Glasgow City. Belfast has been defined as the aggregate of Belfast City, Carrickfergus, Castlereagh, Lisburn, Newtownabbey and North Down. The full breakdown is available at www.centreforcites.org/puas

The Centre for Cities is an independent, non-partisan research and policy institute. Committed to helping Britain's cities improve their economic performance, the Centre produces practical research and policy advice for city leaders, Whitehall and employers.

The LGA is the single voice for local government. As a voluntary membership body, funded almost entirely by the subscriptions of over 400 member authorities in England and Wales, we lobby and campaign for changes in policy and legislation on behalf of our member councils and the people and communities they serve. We work with and on behalf of our membership to deliver our shared vision of an independent and confident local government sector, where local priorities drive public service improvement in every city, town and village and every councillor acts as a champion for their ward and for the people they represent